Landmark Climate Change Suit Dismissed on Appeal by Quorum-Less 5th Circuit

June 3, 2010

Decision

On May 28, 2010, the U.S. Court of Appeals for the 5th Circuit dismissed the appeal in Comer v. Murphy Oil, which resulted in the reinstatement of the trial court’s dismissal of all claims against the energy company defendants. The court dismissed the appeal for a very odd reason – the court did not have a quorum of nine active members to hear the case, because half of the members of the court had recused themselves.

While a decision from the 5th Circuit affirming the district court on the merits would have been preferable, and while lawsuits seeking damages arising from climate change continue to be a threat to oil, coal, chemical and power companies, this is still a welcome victory for the defendants.

The trial court initially dismissed this lawsuit by Mississippi property owners against numerous oil, coal and chemical companies who alleged the defendants’ activities contributed to climate change and magnified the effects of Hurricane Katrina. The trial court concluded that the plaintiffs did not have standing and that the political question doctrine barred their claims.

On appeal, a panel of the 5th Circuit reversed on Oct. 16, 2009, holding that the plaintiffs did have standing to pursue their claims and that the political question doctrine did not apply. The full 5th Circuit granted the defendants’ petition for rehearing en banc on Feb. 26, 2010, by a vote of 6-3.

In its latest ruling, the court found that because it no longer had a quorum of nine active members to hear the case, it would not hear the appeal on the merits. This was not unexpected, as the court had announced almost a month earlier that it no longer had a quorum to rule on the merits of the case. What was unexpected was what the court decided to do as a result of this finding.

By a 5-3 vote, the court refused to reinstate the panel decision that had been automatically vacated by local rule due to the grant of rehearing en banc. The court reasoned that “[t]here is no rule that gives this court authority to reinstate the panel opinion, which has been vacated.” Accordingly, the court concluded that “[b]ecause neither this en banc court, nor the panel, can conduct further judicial business in this appeal, the Clerk is directed to dismiss the appeal.”

The court rejected five other less-drastic options suggested by the parties: (1) asking the Chief Justice to appoint a judge from another circuit to sit by designation; (2) declaring that a quorum existed by defining quorum as constituting a majority of non-recused judges of the court; (3) adopting the Rule of Necessity which allows disqualified judges to sit under certain circumstances; (4) “dis-enbancing” the case and ordering the panel opinion reinstated; and (5) holding the case in abeyance until the composition of the court changes.

Dissents

Judge Eugene Davis, joined by Carl Stewart, dissented. He declared that “[t]he dismissal of this appeal based on a local rule has the effect of depriving appellants of their right to an appeal and allows the local rule to trump federal statutes.” He also said that he found “an inexplicable disconnect between the notion that a majority of the eight unrecused judges has no authority to do anything except literally apply [the local rule requiring that the panel decision be vacated] strictly as written; yet they do have the authority to dismiss the appeal.”

Judge Dennis also filed a blistering, 16-page dissent in which he lamented that “the particular timing of one single judge’s recusal [was] being allowed to conclusively determine the outcome of this case.” Indeed, no reason or explanation was given as to why Judge Jennifer Elrod saw fit to recuse herself after voting in favor of rehearing the case en banc. He attacked the majority decision as “shockingly unwarranted,” “drastic,” “precipitous,” and “manifestly contrary to law and Supreme Court precedents.” He argued that the court should have found that it did indeed have a quorum, and also argued that even if it did not, it had an absolute duty to hear and decide an appeal of right by applying the Rule of Necessity, appointing a judge from another circuit, reinstituting the panel decision, or holding the case in abeyance until the vacancy on the court is filled.

Significance of the Decision

There are five significant implications as a result of this decision.

1. Blunt Momentum of Climate Change Litigation

The largest and arguably most visible of the climate change lawsuits is once again dead, and now can only be revived by the unlikely scenario of the U.S. Supreme Court granting certiorari and reversing. This is obviously a welcome result for the Comer defendants in the short term, especially since it is as if the 5th Circuit panel decision never occurred. At the very least, this decision will blunt some of the momentum the plaintiffs’ bar has achieved in climate change litigation over the last nine months.

2. Winning the Battle but Losing the War?

Though a win is a win, the result may ultimately prove unsatisfying and even disappointing for the defendants. Many observers predicted that the 5th Circuit en banc would affirm the district court, setting up a clear split with the 2nd Circuit decision in Connecticut v. American Electric Power (AEP) and making it likely that the U.S. Supreme Court would accept certiorari of Comer, AEP, or both. Simply put, the defendants and the energy industry in general hoped that Comer would be the battle that would win the climate change litigation war once and for all. That is unlikely to happen now.

The U.S. Supreme Court is less likely to accept certiorari of either Comer or AEP without a true circuit split. And the litigation war now shifts from the relatively defendant-friendly terrain of the 5th Circuit to the Kivalina appeal pending in the much more plaintiff-friendly 9th Circuit. Rather than a resounding victory for defendants, Comer may be viewed as little more than a victory based on a technicality with little precedential value, especially since there was no written decision by the district court. Depending on what happens in the future, Comer might be looked back on as a classic case of winning the battle but losing the war.

3. Less Likely That U.S. Supreme Court Will Review

Even if the U.S. Supreme Court was inclined to view Comer as being a split with the AEP decision, the procedural posture of Comer makes it less likely for the court to grant certiorari. Without any ruling on the merits at all by the 5th Circuit, the U.S. Supreme Court would have to agree to review only the district court decision, akin almost to a direct review. This would be highly unusual and might be seen as “beneath” the court to delve into such matters without a full appellate record. In addition, the court is unlikely to agree to review the 5th Circuit’s decision because it was based on a local rule, and the U.S. Supreme Court will almost certainly defer to the 5th Circuit’s interpretation of its own rule.

4. Recusal Issues for the U.S. Supreme Court?

As discussed in a previous alert, the mass recusal of members of the 5th Circuit in Comer begs the question as to whether such recusals would be an issue for the U.S. Supreme Court as well. Initial analysis suggests that it would. Justice Samuel Alito has recused himself on several occasions from cases involving ExxonMobil due to his ownership of its stock. See, e.g., Exxon Shipping v. Baker; American Isuzu v. Ntsebeza. Likewise, Justice Steven Breyer has recused himself from cases involving BP due to his ownership of its stock. See, e.g., New Jersey v. Delaware; Morgan Stanley Capital Group v. Public Utility Dist. 1. Both ExxonMobil and BP are defendants in the Comer suit.

Similarly, Justice Sonia Sotomayor would also likely recuse herself due to her participation in the Connecticut v. American Electric Power case when she was on the 2nd Circuit. This is true even as to Comer since the issues presented in Comer and American Electric Power are so similar. Therefore, it is likely that Justice Alito, Justice Breyer and Justice Sotomayor would recuse themselves from the decision of whether to grant certiorari as well as any merits decision. This would leave the Supreme Court with the minimum quorum of six. If one more justice were forced to recuse, then the U.S. Supreme Court would be unable to decide the merits even if it wanted to. This is not unheard of in the U.S. Supreme Court, and recently occurred in the case of American Isuzu Motors v. Ntsebeza in 2008 when four justices recused themselves.

In fact, if Justice Kagan is confirmed, the chances that the U.S. Supreme Court will not have a quorum is as high as 50/50. The last time a sitting Solicitor General became a U.S. Supreme Court justice was Thurgood Marshall, and he recused himself from approximately 57% of the court’s cases in his first term due to his duties as Solicitor General (recusal in 98 of 171 cases). Justice Kagan could be expected to recuse herself to a similar degree. This same point likely applies to any appeal of Kivalina from the 9th Circuit as well. However, it is worth noting that because the recusals disproportionately affect the more liberal wing of the U.S. Supreme Court, if certiorari is granted and the court is able to move forward, any resulting decision would almost certainly be in favor of the defendants.

Likewise, such recusals may also affect the decision to grant certiorari. Four members of the court usually must vote to consider the case in order for certiorari to be granted (known as the rule of four). Even if there is a bare-minimum quorum of six, all but two must agree to review Comer. Though Roberts, Scalia and Thomas would likely vote to grant certiorari for Comer or AEP, the likely recusal of Alito means at least one more justice would have to sign on. Ginsberg would be unlikely to do so as would Kagan (assuming she did not recuse). That would leave Justice Kennedy, who is unpredictable when ruling on environmental issues (see Massachusetts v. EPA). It is far from clear that Kennedy would vote to accept certiorari even under normal circumstances, let alone the unusual circumstances that now exist in Comer.

5. Renewed Dialogue on Recusal Policies

One can expect a renewed dialogue on recusal policies for appellate courts. The 5th Circuit has been thoroughly embarrassed by this saga as evidenced by releasing its decision on the Friday before Memorial Day in an attempt to draw as little attention to it as possible. Indeed, it was clear the court did not even know how to handle the situation, as it asked for advice from the parties. Furthermore, a recent Wall Street Journal editorial complained about the possibility of parties gaming the judicial system by forcing mass recusals of judges. Defendants in mass litigation should be cognizant of the possibility of recusal of judges; should closely review judges’ financial disclosures; and should be aware of a court’s recusal policy when analyzing what strategy to take. Such policies vary widely from jurisdiction to jurisdiction.

Comer highlights the unpredictability of such litigation when numerous judges are forced to recuse themselves, making the outcome that much harder to predict.

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